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October 24, 2007


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Most people should have a fairly good estimate of their life expectancy by middle age and should use somewhat longer than that for planning, not averages.

People are probably spending more in retirement these days because they have it and they are living longer. Wealth can compound quite rapidly when it becomes large enough.

Long term care is really for your spouse or dependents. There isn't much need for it otherwise.

It makes a lot of sense to think long. After all, if you die younger then you can leave the money to family or causes. And if not then you know it's ok that you're living to be 95.

By planning on living long, it will hopefully protect you in the future.

In some respects, this article sounds like a promotion for annuity-insurance:

"Try to generate enough income from fixed sources (like TIPS or an immediate annuity) to cover fixed costs."

Fixed costs? It is dead wrong to offer retirement projections based on assumptions that the cost of anything will remain fixed thru the lifetime of the retiree.

The only exceptions would be for fixed-rate liabilities, e.g., mortgages, car loans, etc. But in most cases, people tend not to take retirement until the house and the car are already nearly fully-paid, thus eliminating whatever few "fixed costs" they may have had.

Planning is always a good thing. Savings is a necessary part of that plan. Attempting to guess how long you will live is a fun little parlor game. But few of us focus on the one preventable and highly controllable aspect of that plan: our current health.

We may shun conservative investing in favor of growing our money faster but few of us can argue that maintaining a conservative approach to health will pay off in the future - big time.

The high cost of health care, and we all know that it is one of the hardest factors to tally can be made much easier if we enter those golden years fit and healthy.

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